Tag Archives: Oil and Gas

Is Houston’s Economy Sinking?

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Texas’ largest city is staring at some bleak economic numbers according to Texas Monthly.  With oil and gas prices falling and Houston not being known as an innovation hub, some economists are wondering what will prop up the Houston economy in the near-term.  It certainly is not a tourist destination.  As Red has remarked, one of the worst things about Houston is no one ever comes to visit you and one of the best things about Houston is no one ever comes to visit you.

One interesting point the TM article makes is how the University of Houston led by Tillman Fertita (billionaire owner of bad restaurants and crappy resorts) and State Sen. John Whitmire killed off the University of Texas’ planned expansion on a 300 acre site just south of Loop 610.  That project would have been a major engine of economic growth for the city, but was shit-canned because UH was afraid of any real competition. Maybe rightfully so.  For a city of almost 5 million to have only two major universities (UH and Rice) and a smattering of smaller second or third tiers (TSU, HBU, St. Thomas, UH-Downtown) is almost criminal and clearly has held Houston back compared to other areas who apparently value higher education.   Good work in protecting your turf at the expense of your community guys!

Today in Texas History – January 10

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Black Gold at Spindletop - Lucas Gusher

From the Annals of the Wildcatters –  In 1901, the first Spindletop well came in near Beaumont.  The site had been the object of speculation since the early 1890s,  mostly by amateur geologist Patillo Higgins who was convinced there was a large pool of oil under a salt-dome formation south of Beaumont. He and his partners founded  the Gladys City Oil, Gas and Manufacturing Company but never brought in a successful well.  In 1899, Higgins leased a tract of land at Spindletop to mining engineer Anthony Lucas. The Lucas well erupted on January 10 scattering the oil hands as drilling pipe was blown out of the hole, followed by mud, gas and a 100 foot gusher of oil.  It took 9 days to cap the well.  This started the Spindletop boom.  Within a year, there were almost 300 active wells at Spindletop and hundreds of oil exploration and land companies operating in the area.  Companies such as Exxon, Texaco and Mobil got their start at Spindletop.

Today in Texas History – December 4

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Petroleum Museum | Carl G. Cromwell, San Angelo, TX

From the Annals of the Wildcatters –  In 1928, Carl G. (the Big Swede) Cromwell completed the world’s then-deepest oil well.  Cromwell had brought in the famous Santa Rita No. 1, Cromwell in 1923 on University of Texas land in Reagan County, but was at heart a wildcatter.  Together with company engineer Clayton W. Williams, Cromwell was visionary in wanting to drill deeper than the current limit of around 3,000 feet. In 1926 Williams located a site on UT land and Cromwell’s crews began work.  The work was slow and by November of 1928, he was ordered to shut down in the face of rising costs and technical issues.  He ignored the order, went into hiding, and kept drilling.  The University 1-B came in at an astounding 8525 feet.  It remained the world’s deepest oil well for another three years.

The Dentist Index Predicts Hard Times

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Red’s Dentist, Root Canal Rodney, swears by his self-styled Dentist Index as a leading indicator of economic activity and job growth.   As RCR explained to Red the other day while inflicting pain, he is absolutely swamped right now and that means bad times are here to stay for a while.  This is because everyone that is getting laid off in the oil and gas industry is in a rush to get work done before their dental insurance benefits go away.  The second round will be when other businesses start to contract as a result of the O&G downturn.

Tar Balls on Texas Beaches – Not so Mysterious

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ABC News reports that mysterious tar balls have been washing up on Texas beaches.  Just how often do these folks go to the beach?  In Red’s experience tar balls at the Texas coast are not that unusual.

We don’t have a source for the oil,” Jim Suydam, a spokesman for the Texas General Land Office, told ABC News today, noting that samples of the substance have been sent to the U.S. Coast Guard for analysis. So far, their only conclusion is that it is a “crude oil product” that came from “two different sources.”

“It is unlikely the source is from Texas waters, but possible sources include offshore rigs, a pipeline, a ship, or from natural seepage,” Suydam told ABC News in a statement.

Tar balls are dense accumulations of hydrocarbons that have been mixed and rolled with sand and shells before washing ashore. The source could be natural leaks along the continental shelf, which runs 40 to 100 miles off the Texas shoreline, or the result of frequent spills that occur when crude oil is transported from one tanker to another in the Gulf of Mexico before being brought into port.

If the investigation proves the oil came from man-made sources, it will come as no surprise to Luke Metzer, director of Environment Texas, an environmental advocacy group based out of Austin.

“Oil spills are a way of life here in Texas,” Metzer said, noting that 543 spills occurred in 2012, according to the Texas General Land Office.

“It all adds up to have a big toll on the marine life in the Gulf,” he said.

Metzer argued that Texas should establish “no-take” Marine Protected Areas, which prohibit fishing, oil drilling, and other extractive uses.

Today in Texas History – May 28

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From the Annals of Big Oil – In 1923, the Santa Rita No. 1 oil well came in.  The gusher came in the early morning at the solitary rig located in Reagan County.  The University of Texas had leased 670 sections of its west Texas land to Rupert P. Ricker.  Ricker in turn hoped to make enough selling drilling permits from various wildcatters to make the rental payments to UT.  Frank T. Pickrell and Haymon Krupp bought the drilling permits and formed Texon Oil and Land Company.  They then hired geologist Hugh Tucker to select a site for drilling among the almost 200,000 acres.  Carl G. Cromwell drilled the well which was spudded in only minutes before the drilling permit would have expired.  The incredible gusher and the ensuing development of UT’s vast land holdings transformed the school from a small land grant college in a small city to a major institution of higher education.  The University of Texas system has the second highest endowment of any US university ranking only behind Harvard.

So Much for Local Control

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The Texas Tea Party likes to shout local control and government overreach from the rooftops when it fears the federal government stepping on Texans’ toes.  But when it comes to serving the interests of big oil, the Tea Partisans cannot fall over themselves fast enough to do its bidding.  This time it comes in the form of a bill passed by the Senate and House which will prevent Texas municipalities from banning fracking within their city limits.  But the bill, which emerged as a response to a hydraulic fracking ban passed by Denton voters in November, goes well beyond just fracking and leaves municipalities powerless to regulate any oil and gas practices that do not involve surface operations.

The bill emerged as legislative backlash to a hydraulic fracturing ban passed by Denton voters in November.  The legislation also prevents cities from passing ordinances addressing underground activity, including disposal wells, which have been linked to earthquakes, and pre-empt any ordinance deemed not “commercially reasonable.”

Now Red appreciates the need for uniform rules on drilling practices, but the hypocrisy of the Tea Partisans is just plain shocking.  They insist that the federal government cannot dictate to Texas – but then have Texas turn around and dictate to local government.